Your move, Intel

Recently there was a news report about Intel. It said that at a time when personal computers are giving way to tablets and smartphones, good times might be over for Intel. The argument was that even if Intel manages to get a foothold in smartphone and tablet business, it is never going to get the fat margins that the traditional computer processor brings to it.

I largely agree. Tough times are ahead for Intel.

Mostly, I have been a believer in Intel. It has great technology. It has some of the world’s smartest people working for it. Again and again, it has proved that it can produce chips that push the envelope of what is possible by toying with the rules of physics. In the last six years, after the Core 2 Duo era debuted in 2006, it has executed its business plan with clockwork precision. Tick tock. Tick tock. Yes, the company even calls its processor roadmap Tick-Tock.

The problem for Intel is that it failed to predict the smartphone and tablet revolution. And now when it has realized its mistake, it is running out of time to be competitive again.

Theoretically, the biggest asset Intel has is its fabulous fabs technology. Fabs are factories where silicon chips are made and Intel has the best fab technology. In fact, it is ahead of the competitors by almost one and half years. It is producing chips with 22 nanometre transistors at a time when competition is mostly on the 28 nanometre.

But for some reasons this fab advantage, which Intel used in the past to great effect against its competitors like AMD, doesn’t seem to give it any higher ground in its fight against ARM, the firm whose technology powers almost all handheld computing devices like tablets and smartphones.

Recently, I had a chance to meet Anand Chandrasekher, chief marketing officer of Qualcomm, a firm that makes processors for tablets and smartphones using ARM technology. The interesting bit about Chandrasekher is that he is an old Intel hand. He spent 25 years at Intel. And he was not just any Intel executive. He was the man in charge of Intel’s ultramobility division. Sum of the matter – he knows his chips.

As someone who moved from the Intel camp to ARM camp, Chandrasekher is the perfect man to make sense of ARM vs Intel and how the fight is going to unfold.

Chandrasekher tells me he has great respect for Intel and what it does. “It is a fierce competitor and you can never underestimate it. You can never take your eyes off Intel,” he adds.

But he agrees that glory days of Intel are over. The problem, he says, is that Intel is extremely good at one thing – making traditional computer processors. That means, it is master of making logic chips. But on the smartphone and tablet side, you have to make sure that not only is your processor fast and good, but also take care of battery life, integration with modem and graphics chip. According to him, this is where companies like Qualcomm excel and Intel just downright looks clueless.

And what about Intel’s lead in fabs technology?

“It doesn’t matter,” says Chandrasekher. His view is that with the smartphone and tablet chips, integration of various technologies is the crucial bit. The final product is all that counts. Not how that product is made. It’s of no consequence if it was made with cutting-edge technology in the world’s best fab machines or baked using five-year-old methods.

He explains it with an example. “A great runner will easily win 800-metre or 1,000-metre races. But he can’t compete in triathlon. For that, he not only has to be a runner but also a swimmer and cyclist,” he says.

Both ARM and Qualcomm have a reason to underplay the strengths of their competitor. It’s pretty much given. And I am sure Intel will argue that its technology lead is going to help it win against the competition in the future.

But the fact remains that so far Intel has failed to create the kind of boom that people expect from it. In fact, the Chipzilla still seems to be moving too slow on the mobile front. The company’s 22nm fab technology is the best in the world. But the mobile chips are still made using 32nm. It is also yet to get a hang of the platform that smartphones and tablets require. For example, it won’t ship a System on Chip (SoC) with LTE aka 4G until next year.

Personally, I feel that smartphone and tablet chips are going to get lot more complex in the future and that is likely to give Intel a chance to leverage its expertise. The company is good at making processors. And it is good at fabricating them. The issue for Intel is that by the time the industry reaches that stage, it might be too late for it.

Author

Javed Anwer is a geek at heart, a man of gizmos, gadgets and games. He spends the better part of his nights, and sometimes days too, roaming the virtual alleys of WWW. When he is not on the Internet, he is most likely tweaking his computer to coax more out of it. When he is not doing any of these, he writes for The Times of India. In this blog, WebWise, he tries to document his rendezvous with technology.

Javed Anwer is a geek at heart, a man of gizmos, gadgets and games. He spends the better part of his nights, and sometimes days too, roaming the virtual all. . .